“ We endeavor to enhance the competitiveness of Japanese

  securities and derivatives markets by improving the efficiency, 

  convenience and safety in post-trade processing infrastructure.”

Based on this Corporate Philosophy, JSCC formulates the following business policies.

1． Further Expansion of Clearing Service

Through the efforts in risk reduction made on a global scale since the financial crisis of 2008, progress toward the more active use of central counter party function for wider variety of financial instruments transactions has been made. In Japan, the policy of mandatory use of clearing organization for OTC derivative transactions has been announced by the regulatory authorities.

On the other hand, since the policy of the authorities includes the possible through the direct entry of a foreign CCP as a way of  mandatory CCP clearing, JSCC has to face competitive relationship with leading European and American clearing organizations which provide a wide range of products services. In addition, the current co-existence of  five Japanese CCPs is under discussion to realize more desirable structure.

In the light of these situations, JSCC, which has been clearing exchange-traded equities, futures and options, will step up efforts to expand the scope of clearing services to including more diversified products. In doing so, JSCC will contribute to the development of the Japanese financial and capital markets through improved efficiency, convenience and safety of transactions, meeting the needs of market players.

JSCC thus sets “Further Expansion of Clearing Service “ as the first pillar of its business policy to seek future development necessary for more established position as a Japan’s primary securities market infrastructure.

• Prepare the concrete operation procedures for clearing service for Proprietary Trading Systems.
• Work on the concrete operation model, system structure and cost analysis etc. with respect to the clearing service for OTCderivatives products.
• Provide the clearing service for the new products listed in the exchanges and actively develop post-trade infrastructure to satisfy the needs of market participants.
• Start the consideration on the upgrading of clearing system to enhance its functions.
• Seize the opportunity to cooperate with the domestic/international clearing houses to provide a more diversified clearing service.

2．Further Strengthening Risk Management System

Whilst the wider use of CCPs has been gaining momentum inevitable concentration of counterparty risk at CCP raises concern among the market participants and the authorities. The CPSS / IOSCO announced their intention to update the recommendations for Central Counterparties 2004 so that the CCPs meet higher standards in terms of risk management ability.

In addition, the Basel Committee on Banking Supervision is proposing that transactions cleared by CCPs which do not meet the CPSS/IOSCO standards should be required a capital charge. In such circumstances, CCPs are expected to achieve strong risk management procedures in place.

JSCC thus regards “Further Strengthened Risk Management System” as the other pillar of its business policy in order to achieve the enhancement of the quality of the clearing service leading itself on the path to sustainable growth. 

• Start for the introduction of the intra-day collateral call.
• Continue efforts for the enhancement of the quality of the risk management functions in keeping with the updating of CPSS / IOSCO recommendations for Central Counterparties 2004,
• Strengthen the basic business function by improving the information security standards and enhancing the quality of the operation.